Abstract
Studies have shown that organizational change is hard, and the human dynamics of change are often the primary hurdles. Organizations that effectively manage organizational change focus on both project management as well as change management. This paper provides an overview of the challenge of change as well as information about how project managers can employ change management to effectively bring about change within an organization. Specifically, this paper covers the challenge of organizational change, characteristics of successful changes, the difference between project management and change management, principles that guide changes within organizations, a process for managing change, and tools for managing change. Organizations that employ effective project management as well as change management can successfully drive change and win.
The Challenge of Change
The one constant is change. As organizations and their people are pressed to work faster, smarter and leaner, change is here to stay. It can sometimes feel like the floor is constantly shifting. Change can make employees feel like victims, like the change is happening “to” them. Change can be equally taxing on organizations. Michael Beer estimated that half of all change efforts fail (Beer & Norhia, 2000, p.18). And even more changes fail to reap the benefits they originally promised.
In 2008, 80% of leaders around the world (CEOs, managers, senior leaders in the public sector) expected substantial change in their organizations over the next three years (IBM, 2008). Looking back, it may not seem like a surprise as you sit at your desk and think about the challenges facing your own organization. Even today, most would agree that change is a common denominator among organizations worldwide.
Sadly, CEOs also report in IBM’s same study that failed initiatives are on the rise—60% more change initiatives were reported to have had limited, or no, success, than those in the 2006 survey. Those same CEOs noted that that their ability to manage the changes they expected was 22% less than their need for it. That “change gap” was three times higher than it was reported to be just two years earlier.
While some are cringing and thinking, “Yikes! How the heck are we going to pull it off?” the more enlightened are thinking, “Opportunity! If we can manage change effectively while our competitors are caught up in their shorts about it, we can catapult ourselves ahead.”
Change doesn’t have to mean failure. Many companies have done it successfully.
The approach to successfully guiding organizations and people through change is called Change Management. When organizations take a thoughtful, organized approach to managing through change, employees feel part of the process and organizations are more likely to meet their objectives. Companies successful at guiding change have aligned and visibly supportive leadership. In addition, they have employees who are ready, willing and able to manage and make the change.
Ready, Willing, and Able
Organizations that successfully change themselves address more than process improvements, technology innovations and market forces. They address people issues as well. Companies good at change understand that goals are met through people. Trying to improve quality? Increase customer satisfaction? Lower costs? Improve processes? Innovate? It’s the employees who impact quality of products and services, interact with customers, use resources and create new ideas. A plan is just a piece of paper if no one is willing to follow it and a goal is just a number if no one cares about achieving it.
Companies successful at change have employees who are ready, willing and able for the change. Successful organizations recognize that resistance is a natural, expected part of any change and they work to address that resistance. It’s human nature to resist change. Some of us are open to new ideas. Some of us take a little longer. There are many reasons employees resist change: fear of the unknown, loss of control, work overload, miscommunication. Some reasons for resistance are legitimate. Companies good at addressing resistance first take time to listen and understand it. They share information and get feedback. They’re willing to make adjustments based on that feedback. Understanding and addressing the issues early prevents setbacks later.
So how do successful companies create ready, willing and able employees? Employees are ready because of communication and involvement. Employees are ready when they understand why the status quo won’t do. They understand why the change is necessary for the survival of the company. They understand it’s a priority. Benchmarking and sharing data and company goals can help make the case for change. For example, what are your quality numbers compared to the competition’s numbers? Are you losing market share based on poor quality? Why do the employees have to care? Companies good at change also create temporary work groups and empower employees to make some of the decisions that will affect them.
Employees are willing when they are motivated to work in new ways. They’re willing when their job has been redesigned and they see how it fits into the new plan. They’re willing when they are recognized and rewarded for adopting the new ways of working, not the old ways, and when they are evaluated based on the new business goals and measures. For example, is everyone evaluated on quality? Are employees recognized for making quality improvements? Are there team rewards to encourage groups to work together toward quality improvement?
Employees are able when they have been educated and trained to support the new way of working. For example, do they know how to measure and track quality? Do they have the tools and skills to work as a team to address quality issues? Employees are able when the organization structure supports the business goals, whether it’s working in teams or cross functional task forces.
Managing the Change as well as the Project
Recognizing that the odds are not great with change, some organizations funnel a tremendous amount of time and effort into project management. Unfortunately, that is often not enough.
Recently, a multi-billion dollar company’s implementation of a system-wide technology system could only be described as troubled. The project had been underway for five years—a long time even for the largest implementations. Poor leadership, lack of coordination across multiple locations, misaligned objectives, scarce resources, and other problems plagued the program.
The most recent attempt to get the system up and running was announced with a new and improved focus on project management. A team of project managers were put in place; they held several conference calls a week across locations to track progress; they monitored spending on the program; and they ensured there was a process in place to escalate issues.
With all of the well-intentioned effort expended and money spent, results were still elusive. The implementation of the system was moved out even another three years. All the while, team members were taken off of their line jobs, the organization was defocused, and money was leaking out of the organization like a bad faucet.
It was not as if the team members were trying to fail. On the contrary, they were trying hard to succeed—they reacted quickly to every request to gather data, review documents, and attend meetings. But the cards were stacked against them. The project had effective project managers, but because the project lacked effective change management, the organization was spinning its wheels.
Oftentimes, organizations launch change initiatives thinking that having effective project management will ensure a good outcome. Unfortunately, project management and change management are not the same thing. They are, however, highly inter-related, and each depends on the other’s success. While project management seeks to ensure that that the team, budget and timelines are managed effectively, change management seeks to get the people in the organization (as well as stakeholders outside of the organization) ready, willing, and able to work in new ways.
A systematic process to manage change should be connected to project management efforts. A specific focus should be placed on helping the people in the organization change. When 575 organizations were asked what they would do differently on their next change effort, one of the most commonly cited responses was “improve change management planning and more effective application of change management tasks” (Prosci, 2009).
Effective change management engages leaders at the right level; ensures that people in the organization understand and care about how the change will impact their work; and ensures that people have the skills to do the new work.
While the focus of the project management team is generally on project planning, issue tracking, budget monitoring, and issue resolution, the focus of the change management team is on behaviors, resistance, stakeholder commitment, leadership behaviors, communication, and infrastructure supports and reinforcements.
Successful changes are managed carefully and thoughtfully by project managers with coordinated processes. Project managers use tools to get that work done, such as work plans, scope documents, and risk assessments.
Similarly, successful organizational change that people are ready, willing and able to adopt takes thought and coordination. A well-managed change that no one understands, cares about, or knows how to do will not make an impact in the organization. Change managers use tools that are critical to successfully changing organizations—tools such as stakeholder analyses, communication plans, and workforce transition plans make changes happen for the individual. And change in an organization happens when individuals change.
The Eight Constants of Change
Before diving into tools and tactics, it is helpful to back up just a bit. If organizations want to change effectively, they need to recognize and deal with the basic and undeniable truths about change (Aaron & Nelson, 2008). These are things that can’t be avoided or changed—ironic, yes—but that can be mitigated, leveraged, and worked with to help organizations change with more ease and less churn.
The first truth is that organizations change when the people within them change. When it comes to organizational change, it truly does take a village. Organizations are, in essence, groups of people. If an organization is going to change, a critical mass of the people within that organization need to go through their own individual change process.
Second, resistance is inevitable. You probably heard it first in high school physics, but Newton said it best when he said “an object at rest tends to stay at rest.” There are personal, structural, and physiological reasons for people to resist change. Organizations that expect and deal with resistance proactively will be able to experience the most effective changes.
Third, commitment to the past hinders change in the future. Like a tree’s roots, our hold on the way we do things grows deeper and deeper over time. The success or failure of changes in the past, the employees’ perception of the current state, and the culture of the organization all help determine how deep the roots of an organization go, and how hard it will be to change.
Fourth, connecting to the head and the heart builds commitment. People are not purely rational. They need to have a rational recognition of the need to change, as well as a deeper emotional connection to believe in what the change is all about. Winning the hearts of the people who will experience the change will make all the difference.
Fifth, a leader’s actions speak louder than words. What leaders do and say have more influence over the success or failure of a change than anything else. People are watching leaders constantly (not just in scripted moments) for cues about changes. If the leader is the celebrity, the followers are the paparazzi—and leaders should always be aware of the paparazzi.
Sixth, effective communication demands quality and quantity. Effective communication is critical during any change effort. Honesty, organization, consistency, and responsiveness will all help ensure that communications are supporting the change. You can say that again (…and again…and again).
Seventh, people support what they help create. The movie Field of Dreams was close, but not exactly right. It is not “if YOU build it, they will come.” But rather, if THEY build it, they will come. People inherently connect with something they help build. Engaging people in the change effort early on will pay out big dividends in the long run.
And lastly, sustaining change takes support and reinforcement. After an organization changes, you are not in Kansas anymore. Organizations that make change stick make sure that they are hiring, training, developing, measuring, rewarding and communicating with people in ways that are consistent with the new paradigm rather than the old practices.
A Process for Managing Change
So how do organizations and the people who work in them actually manage change? A simple model known as The Change Management 101TM Model (Exhibit 1) outlines activities to manage business change: “Plan, Do, Sustain” (Nelson & Aaron, 2005, p. 7). Each phase includes two specific stages necessary to the change process. As changes move from one stage to the next, project leaders just need to take it step by step—gather information, establish milestones, and measure progress.
Exhibit 1 – The Change Management 101TM Model
Plan
The “Plan” phase involves assessing the needs of the organization and developing plans to help people change their behaviors. Proper planning will help you identify the workforce issues related to the proposed change before they impede progress.
The first part of planning for the change is to Assess Needs. A critical element to planning is assessing the needs of individuals and the organization. Next, you need to Develop a Plan. Customized plans that address the needs of individuals and the organization must be developed in order to change behaviors. The data gathered from assessing needs drives the priorities and actions in these plans.
Let’s use an example most of us can relate to—say, losing weight. If you were using this model for a personal change such as losing weight, you would first assess your needs. You would figure out how much weight you need to lose, assess your current health status, think about whether you need a personal trainer or a nutritionist, and then develop a plan. Maybe you decide that you will go to the gym before work every day, you will take a brown bag lunch to work every day, and that you will change from whole milk to skim.
Do
The “Do” Phase entails launching communications to let people who will be impacted know what you are trying to accomplish and why you are doing it and transitioning the work to new methods. Effective communication and transition activities will create a receptive environment for change and facilitate a smooth implementation.
The first part of “doing it” requires that you Launch Communications. Project team members or the owners of the change need to reach out to others in the organization. Letting people know what’s happening in this early stage helps create an environment where change is more likely to stick. Next, you need to Transition Work. Part of managing change is transitioning work from old ways to new ways. People must be ready for the change just at the time of the implementation, roles and people must be shifted where necessary, and people need to have the right skills to do what is expected of them.
For your diet, you would set up time with your trainer, let your family know that you are going to need different foods in the house, and possibly join a walking group or other support group. Then you would start your diet. Begin the exercise program, start working with the trainer, and track progress.
Sustain
The most often overlooked aspect of any change project is the “Sustain” Phase, during which your team aligns structures to support the new ways of working and integrates new ways into the business. If the organization fails to sustain new behaviors, business benefits will likely not be realized or they will be short-lived.
Sustaining the change requires that you Align Structures. Without reinforcing new behaviors, people naturally revert back to old ways of working. Next, sustaining changes requires that you Optimize Results. In order to ensure that the changes yield optimal results over time, new behaviors must be integrated into the new way of working.
For your diet, you might get involved in some long-term sports groups, become the organizer of a weekly walking group, or compile your cookbook of new low-fat recipes. You would reflect on what worked and did not work for you, and you might even buy new clothes to fit your new smaller size.
Project managers can and do beat the odds and make their changes successful. Take it step-by-step. You can get ahead of the competition and proactively move your organization toward the next big thing. Just Plan it, Do it, and Sustain it.
Tools for Managing Change
Now that you understand the model, the next step is to understand some specific tools. Change can be managed by using specific tools and processes. Most organizations already use tools to assist in the collection and analysis of data. Organizations have tools for assessing customer needs, tracking finances, managing projects, measuring quality, and determining customer satisfaction levels. There are tools for managing change as well. Change management tools provide a way to collect and analyze data related to people issues and change. Like many tools, the information gathered from the change management tools can improve decision-making and planning.
Change Readiness Audits
The Change Readiness Audit tool is great place to start. A Change Readiness Audit helps evaluate the level of organizational readiness for change (Nelson & Aaron, 2005, p. 12).
Change Readiness Audits vary in length and target audience. These audits can have as little as five questions or as many as 30. The audience can be a department, a management team or the whole company. The size and detail of the audit is determined by the scope of the change. A Change Readiness Audit lists a series of questions that can be delivered by written survey, electronic survey, one-on-one or focus groups. Here are some sample questions from a Change Readiness Audit:
- Is there a clear vision for this change?
- Do people understand the need for this change?
- Are leaders willing to commit resources to make this change successful?
- Is there a way for leaders to demonstrate commitment to this change?
- Is there adequate participation in the change for people most affected by it?
- Are there well-trained people with time available to implement the changes?
- Is there an understanding of how to sustain the change through modifying HR systems (such as staffing, training, appraisal, rewards, communication)?
The goal of using a tool like this is to uncover problems early. Sometimes, a Change Readiness Audit identifies red flag areas that require more information. For example, if participants think resources are inadequate and leaders aren’t committed, these perceptions need to be investigated further. There may be competing initiatives. Leaders may be willing to commit but just haven’t been asked to actively demonstrate and communicate their commitment. The tool helps get potentially destructive perceptions and problems out in the open so that they can be addressed. Once the results of a Change Readiness Audit are analyzed, other change management tools can be used to address problem areas and challenges.
Stakeholder Analysis Tools
A change management tool that many people use is a Stakeholder Analysis tool. This type of tool is a place to list all the groups affected by the change and track their current and required levels of commitment to the change. If stakeholders aren’t committed to the change, tools and processes are available to build stakeholder commitment. Communication plans, communication networks, leadership involvement plans and stakeholder commitment meetings are proven tactics to improve commitment to change. Many Change Management approaches work together to provide a comprehensive approach to identify and address people issues related to change.
Change Management Work Plans
For any change that will require people to change the way they think or act, a Change Management Work Plan should be developed. The work plan should reflect actions that address the relevant issues identified by a Change Readiness Audit as well as other assessments. A Change Management Work Plan is a tool for listing change management activities, estimating effort required, assigning responsibility and tracking progress (Nelson & Aaron, 2005, p. 38). While it is often helpful to keep a separate document for change management activities, there should be linking milestones and activities that are common in both the Change Management Workplan and the master project workplan. The tracking of both documents should be similar and should be done in tandem.
Conclusion
Change in today’s business environment is difficult. Change must be managed proactively and people issues are some of the biggest challenges. To achieve strong business results, employees must be committed to success, motivated to get results and possess the tools to get the job done. The challenge is to apply effective change management techniques to anticipate and address employee and organizational issues.
Managing change is similar to managing quality or customer satisfaction. Managing change requires data collection, data analysis, and specific tactics to address problem areas and challenges. Change management tools provide a means to collect relevant data that can be used to address employee resistance and organizational barriers. Combined with other project plans, change management tools help achieve desired business results. The next time the organization is changing, think about the action steps of “Plan, Do and Sustain” and add some of these proven change management tools to the “to-do” list. Make sure your organization is part of the minority that reaches their business goals.
